New Study Examines Lower Costs to Medicare and Seniors for Cancer Care in the Physician Office Setting

Experts Discuss Implications of New Data as Related to Proposed $3 Billion Medicare Cut to Cancer Care

WASHINGTON, Oct. 27, 2011 /PRNewswire-USNewswire/ -- Leading cancer care advocates and providers gathered today to discuss the results of a new study that finds that per-patient-per-month (PPPM) chemotherapy service costs and patient copay amounts for Medicare beneficiaries are significantly lower in community-based care settings. The study, "Site of Service Cost Differences for Medicare Patients Receiving Chemotherapy," was performed by Milliman and commissioned by McKesson Specialty Health, a division of McKesson Corporation, on behalf of The US Oncology Network. Representatives of The US Oncology Network explained the importance of this cost difference as it relates to a proposed $3 billion Medicare reimbursement cut to cancer care offered to the Joint Select Committee on Deficit Reduction (Select Committee) as a potential payment offset within federal debt reduction efforts.

"In their memo outlining deficit-cutting actions the Select Committee may consider, Democratic House Ways and Means staffers noted that if Congress implements this drastic funding cut for all cancer drugs administered in physician offices, some smaller physician practices may not be able to afford to administer these drugs in their offices," said Roy Beveridge, M.D., Chief Medical Officer, The US Oncology Network. "We want the Select Committee and Congress to realize that ensuring high-quality, cost-effective care, and lower costs for Medicare and its beneficiaries fighting cancer, requires a viable community cancer care delivery system."

The proposed Medicare payment cut to cancer care would lower reimbursement for cancer-fighting drugs administered in a physician's office under Medicare Part B from the current rate of Average Sales Price (ASP) plus 6 percent to ASP plus 3 percent. This decreased payment would equate to a $3 billion funding cut to cancer care, as projected by the Congressional Budget Office (CBO), and would particularly impact already financially strained community cancer centers.

The study details the cost and utilization differences for nearly 80,000 Medicare patients receiving chemotherapy by site of service. It found that total PPPM allowed costs for physician office based care were approximately $600 per patient per month less than other settings, amounting to a difference in cost of just under $6,500 per cancer patient annually. Additionally, patient copay amounts were found to be approximately 10 percent lower for physician office based care, which totaled more than $650 per patient per year.

"When cancer care providers shift from the community to more urban settings, this often represents an access to care challenge for patients constituted by added travel costs and lodging requirements that many patients simply cannot afford, especially those patients residing in rural communities," said Nancy Davenport-Ennis, Founder and CEO, National Patient Advocate Foundation (NPAF). "As the Select Committee considers how best to achieve budgetary savings over ten years, NPAF respectfully requests that it consider the impact of budgetary savings on patient access to care, particularly for Medicare beneficiaries fighting cancer."  

"Approximately half of national cancer care spending – estimated at $125 billion in 2010 – is associated with Medicare beneficiaries," said Bruce Pyenson, F.S.A., M.A.A.A., Principal and Consulting Actuary, Milliman in New York City. "This project required us to examine site-of-care issues as they are often an important determinant of Medicare and patient cost."

"Community-based cancer centers provide treatment to more than 80 percent of America's cancer patients, and most chemotherapy is delivered in oncologists' offices," said Ted Okon, Executive Director, Community Oncology Alliance. "Unfortunately, due to existing financial and administrative challenges nearly 200 community-based oncology practices have closed within the past three years, and hundreds more are at risk of shutting down. When practices close, this not only impacts patient access to care but also translates to higher costs of care for patients and for Medicare, including added transportation costs and logistical burdens as individuals must arrange for treatment outside of their communities."

In recent weeks, more than 60 bipartisan lawmakers and representatives of national patient advocacy groups, community cancer care providers and health care professional organizations have urged the Select Committee to reject the proposed $3 billion funding cut to cancer care as it would lead to facility closures, barriers to care and significant health care job losses in the community setting.

About The US Oncology Network
The US Oncology Network is one of the nation's largest networks of community-based oncology physicians dedicated to advancing cancer care in America. Like-minded physicians are united through The Network around a common vision of expanding patient access to high-quality, integrated cancer care in communities throughout the nation. Leveraging healthcare information technology, shared best practices, refined evidence-based medicine guidelines, and quality measurements, physicians affiliated with The US Oncology Network are committed to advancing the quality, safety, and science of cancer care to improve patient outcomes. The US Oncology Network is supported by McKesson Specialty Health, a division of McKesson Corporation focused on empowering a vibrant and sustainable community patient care delivery system to advance the science, technology and quality of care. For more information, visit

About Milliman
Milliman is among the world's largest independent actuarial and consulting firms.  Founded in 1947 as Milliman & Robertson, the company currently has 53 offices in key locations worldwide.  Milliman employs over 2,500 people.  The firm has consulting practices in healthcare, employee benefits, property & casualty insurance, life insurance and financial services.  Milliman serves the full spectrum of business, financial, government, union, education and nonprofit organizations.  For further information, visit

SOURCE The US Oncology Network